Streiff steers Peugeot towards 'radical' change

The new chief executive of Europe's second largest car company has lost no time in stamping his authority on the business after unveiling a boardroom overhaul and setting in motion plans for a radical restructuring.

Christian Streiff, who officially took over PSA Peugeot Citroën on Tuesday, said "nothing is being ruled out" as he begins his turnaround at what was once one of the industry's most admired companies.

Mr Streiff was appointed last year following a three-month tenure at Airbus, the European aircraft manufacturer. He walked out on the troubled company in August after failing to get boardroom backing for a restructuring plan that involved large job cuts.

Among his changes at PSA, Mr Streiff has beefed up the managing board from three to five executives. Control over the Peugeot and Citroën brands and the production operations are being integrated to break down management "silos".

And he has given executives and divisional managers 100 days to come up with proposals that will form a restructuring plan. Mr Streiff said: "This new streamlined, efficient organisation will ensure that the necessary decisions are taken without delay to swiftly restore our group to profitable growth."

Stuart Pearson, analyst at Citigroup, said in a research note: "We remain convinced that Streiff will waste little time in attempting to streamline the group."

However, another analyst warned that if Mr Streiff tries to move too quickly, he could run up against the sort of resistance he experienced at Airbus.

Peugeot Citroën has suffered from a weak product line-up and competition from more efficient Japanese and South Korean car companies. Mr Streiff said he wanted a "return of the magic" that produced successful cars like the Peugeot 206.

PSA's problems were underlined yesterday when it disclosed that profits slumped 83pc to €176m (£116m) in 2006. Worldwide vehicle sales fell 0.7pc for the year to 3.37m vehicles. Margins were 2pc, sharply down from the 3.4pc in 2005, but ahead of analyst expectations of around 1.8pc.

The fall in profits was in part due to costs related to the closure of the company's plant at Ryton, near Coventry. The land at Ryton is likely to be sold to developers, and the company said it might complete a sale within two to three months.

Meanwhile, Mr Streiff said he "felt comfortable" with yesterday's European Union announcement of a cap on carbon dioxide emissions from cars. He said: "The cost of any regulations will be for everyone, so for us it becomes an issue of competitiveness.

"PSA has built a serious leadership in alternative technology so my feeling is that it will be an advantage in the future."